Buy These 5 Breakout Stocks Now for Big Gains

Trading stocks that trigger major breakouts can lead to massive profits. Once a stock trends to a new high or takes out a prior overhead resistance point, then it's free to find new buyers and momentum players who can ultimately push the stock significantly higher.

Breakout candidates are something that I tweet about on a daily basis. I frequently tweet out high-probability setups, breakout plays and stocks that are acting technically bullish. These are the stocks that often go on to make monster moves to the upside. What's great about breakout trading is that you focus on trend, price and volume. You don't have to concern yourself with anything else. The charts do all the talking.

Trading breakouts is not a new game on Wall Street. This strategy has been mastered by legendary traders such as William O'Neal, Stan Weinstein and Nicolas Darvas. These pros know that once a stock starts to break out above past resistance levels and hold above those breakout prices, then it can easily trend significantly higher.

With that in mind, here's a look at five stocks that are setting up to break out and possibly trade higher from current levels.

Glaukos

One health care player that's starting to move within range of triggering a near-term breakout trade is Glaukos (GKOS) , which develops and commercializes products and procedures designed for the treatment of glaucoma. This stock has been moving to the upside over the last three months, with shares notably higher by 16.6%.

If you take a look at the chart for Glaukos, you'll notice that this stock has been uptrending a bit over the last few weeks, with shares moving higher from its low of $21.82 to its recent high of $26.36 a share. During that uptrend, shares of Glaukos have been making mostly higher lows and higher highs, which is bullish technical price action. This stock counter-trended a touch higher on Thursday versus the overall market weakness, after it bounced off its 20-day moving average of $24.45 a share. That bounce is now quickly pushing shares of Glaukos within range of triggering a breakout trade above a key downtrend line that dates back to November.

Traders should now look for long-biased trades in Glaukos if it manages to break out above that downtrend line that will trigger over $25.47 to $26.36 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 145,468 shares. If that breakout fires off soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $26.97 to $27.64 a share. Any high-volume move above those levels will then give this stock a chance to make a run at $30 a share.

Traders can look to buy Glaukos off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support at $23.43 a share. One can also buy this stock off strength once it starts to clear those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Osiris Therapeutics

A biotechnology player that's starting to spike within range of triggering a big breakout trade is Osiris Therapeutics (OSIR) , which researches, develops, manufactures, markets and distributes regenerative medicine products in the U.S. This stock has been smashed by the bears over the last six months, with shares down large by 45.6%.

If you take a glance at the chart for Osiris Therapeutics, you'll notice that this stock has been attempting to carve out a major bottoming chart pattern over the last two months, with shares finding some buying interest at $9.80 to $9.76 a share. This stock displayed some relative strength on Thursday versus the overall market weakness, when it rip higher right off those key support levels and back above its 20-day moving average of $10.30 a share with strong upside volume flows. Volume for that day registered over 378,000 shares, which is above its three-month average action of 268,925 a shares. This high-volume spike is now quickly pushing shares of Osiris Therapeutics within range of triggering a major breakout trade above a key downtrend line that dates back to November.

Traders should now look for long-biased trades in Osiris Therapeutics if it manages to break out above that downtrend line that will trigger over $10.67 to $10.84 a share and above $10.98 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 268,925 shares. If that breakout materializes soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $11.26 to its gap-down-day high from November at $11.75 a share. Any high-volume move above $11.75 will then give this stock a chance to re-fill some of its previous gap-down-day zone that started near $14.50 a share.

Traders can look to buy Osiris Therapeutics off weakness to anticipate that breakout and simply use a stop that sits around its new 52-week low of $9.76 a share. One could also buy this stock off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Staples

A specialty retailer that's starting to spike within range of triggering a big breakout trade is Staples (SPLS) , which together with its subsidiaries, operates office products superstores. This stock has been under heavy selling pressure over the last six months, with shares trending sharply lower by 37.3%.

If you take a glance at the chart for Staples, you'll notice that this stock has recently formed a double bottom chart pattern, after shares found some buying interest over the last two months at $9.22 to $9.25 a share. This stock ripped sharply higher on Thursday right above those support levels and back above its 20-day moving average of $9.53 a share with strong upside volume flows. Volume for that day registered over 13 million shares, which is well above its three-month average action of 10.22 million shares. This high-volume spike higher is now quickly pushing shares of Staples within range of triggering a big breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in Staples if it manages to break out above some key near-term overhead resistance levels at $10.06 to right around $10.25 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 10.22 million shares. If that breakout develops soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $10.50 to its 50-day moving average of $11.19, or even just above $12 a share.

Traders can look to buy Staples off weakness to anticipate that breakout and simply use a stop that sits right below those recent double bottom support levels. One can also buy this stock off strength once it starts to move above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

GNC Holdings

Another stock that's starting to trend within range of triggering a big breakout trade is GNC Holdings (GNC) , which is a specialty retailer of health and wellness products, including vitamins minerals and herbal supplement products, sports nutrition products and diet products. This stock has been hammered lower by the bears over the last six months, with shares off sharply by 27.6%.

If you take a glance at the chart for GNC Holdings, you'll notice that this stock displayed some relative strength on Thursday versus the major market decline, after shares jumped higher right off both its 50-day moving average of $31.06 a share and its 20-day moving average of $31.17 a share with decent upside volume flows. This spike higher pushed shares of GNC Holdings into breakout territory, after the stock closed above some key near-term overhead resistance levels at $31.94 to $32.10 a share. Shares of GNC Holdings are now quickly moving within range of triggering a bigger breakout trade above some more key near-term resistance levels.

Traders should now look for long-biased trades in GNC Holdings if it manages to take out some near-term overhead resistance levels at $33.23 to its gap-down-day high from October right around $34 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 2.53 million shares. If that breakout kicks off soon, then this stock will set up to re-fill some of its previous gap-down-day zone from October that started at $38.67 a share.

Traders can look to buy GNC Holdings off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $31.06 or near more key support at $29.82 a share. One can also buy this stock off strength once it starts to trend above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Uniqure

My final breakout trading prospect is biopharmaceutical player Uniqure (QURE) , which develops adeno-associated virus-based gene therapies through its technology platform for multiple therapeutic areas. This stock has been hit hard by the sellers over the last six months, with shares down large by 35.2%.

If you look at the chart for Uniqure, you'll notice that this stock soared sharply higher on Thursday back above its 20-day moving average of $16.64 a share with monster upside volume flows. Volume for that day registered over 2.30 million shares, which is well above its three-month average action of 387,529 shares. This high-volume rip to the upside also pushed shares of Uniqure into breakout territory, since the stock cleared some near-term overhead resistance at $16.73 a share. This move is now quickly pushing this stock within range of triggering a much bigger breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in Uniqure if it manages to break out above its 50-day moving average of $18.05 a share and then above more key resistance levels at $18.20 to around $18.50 a share with volume that hits near or above its three-month average action of 387,529 shares. If that breakout triggers soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $19 to $20, or even $22 to around $23 a share.

Traders can look to buy shares of Uniqure off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support just below $16 a share. One can also buy this stock off strength once it starts to bust above those breakout levels with volume and then simply use a stop that sits a conformable percentage from your entry point.

Disclosure: This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.